From 1 July 2019, all employers will need to start complying with Single Touch Payroll, which has been introduced by the ATO to streamline payroll reporting.
STP commenced for employers of 20 or more employees as at 1 July 2018.
What is Single Touch Payroll?
When you complete your payroll, you will be reporting the payments made, tax withheld, allowances, deductions and super information for each employee directly to the ATO via your Single Touch Payroll-enabled solution. You do not need to change your payroll cycle to comply with this change and can continue to pay weekly, fortnightly or monthly.
What are the benefits?
Single Touch Payroll will eliminate manual payroll tasks including:
- Providing annual / part-year payment summaries, or for termination payments (provided the employer complies with STP reporting requirements for the full financial year)
- Providing payment summary annual report and copy of employees’ payment summaries to the ATO
- Providing TFN declarations to the ATO
- Filling out paper based TFN and Super Choice forms
Employees will be able to access their year to date tax and superannuation information through their myGov account, linked to the ATO, as well as their payment summary (called an ‘income statement’ in myGov). Whilst it is not mandatory to have a myGov account, employees will not be able to access this information without one, but can instead request a copy of their payment information from the ATO.
Are there any exemptions / concessions?
The Commissioner of Taxation, Chris Jordan, has provided a personal guarantee that the ATO are taking a flexible, reasonable and pragmatic approach, with number of concessions available for employers, as below:
- Micro employers (1 to 4 employees): offered help to transition to STP and a number of alternative options – such as allowing those who rely on a registered tax or BAS agent to report quarterly for the first two years, rather than each time payroll is run.
- Small employers (19 or less employees):
- can start reporting any time from the 1 July start date to 30 September 2019.
- deferrals will be granted to any small employer who requests additional time to start STP reporting.
- will not be forced to purchase payroll software if they don’t currently use it.
- Exemptions from STP reporting will be provided for:
- employers experiencing hardship, or in areas with intermittent or no internet connection.
- closely held payees for the 2019-20 financial year, with STP reporting commencing from 1 July 2020.
- There will be no penalties for mistakes, missed or late reports for the first transition year.
Please contact your Allan Hall advisor should you wish to discuss submitting a deferral application, or for further information regarding closely held payees.
How do I comply with Single Touch Payroll?
There are a number of ways to report, as follows:
- Through your Single Touch Payroll enabled payroll software;
- Through a third party, such as a bookkeeper or accountant; or
- Through a low-cost solution, such as a simple payroll solution, mobile phone app, or portal. These will best suit micro employers, and will cost less than $10 per month. A number are available now and can be found at No-cost and low-cost STP solutions.
If you are on a desktop software package it is unlikely that it will support Single Touch Payroll and you will need to consider updating to a cloud–based accounting software package.
We suggest you contact your software or payroll provider to enquire whether they are Single Touch Payroll ready, or contact us and we can do this for you. Our team of experienced bookkeepers can also assist with transition from desktop to cloud based.
Some payroll software providers have been granted deferrals by the ATO, if they are not Single Touch Payroll ready, and this will also apply to existing customers of the specific software.
Does this change BAS Reporting?
Yes, the W1 and W2 on your activity statement will be pre-filled with amounts that have been reported through Single Touch Payroll. Employers will still have the ability to adjust or correct information in their activity statement.
How do I find out more?
Our HR and Bookkeeping teams hosted two free STP Seminar for clients and friends. If you missed this event but would be interested in attending a future similar event, please register your interest here. If there are a number of people interested, we can provide an additional session.
In the meantime, if you would like to discuss the implications Single Touch Payroll may have on your business, please feel free to contact your Allan Hall advisor on +61 2 9981 2300, or our HR team directly on +61 2 8978 3752.
Our team of expert HR Consultants can support you with all your people needs and is currently offering a FREE HR Health Check to identify possible risks and provide you with comfort that you are meeting your compliance obligations. Please use the button below to register, or alternatively click here to learn more about our HR team and services.